RE: How to Run Your Business Successfully (Part 3)
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An easier analogy for me.
A man can have a nice house, a nice car, and all the usual utilities of electric, gas, water and so on.
If he has equity in the house and car he can be very rich on paper.
However, it only takes a couple of missed paydays at work and the mortgage doesn't get paid, the car payments don't get paid, and the utility bills don't get paid. He may have equity and look rich but without the regular money coming in to service the monthly demands he goes bankrupt and loses everything.
The same can happen to a business. They can have everything operating great and a very strong annual balance sheet.....but if money isn't available when needed to pay staff, service debts, pay utilities, or fix equipment then the business will fail.
In Canada business lines of credit are common. A contingency fund to provide liquidity when the accounts receivable take longer to collect than the accounts payable. I'm guessing that isn't a viable option in your country. Very sad really. Thanks for the post though.
Getting credit in Nigeria is hellish. The process is slow and you might never receive it due to their unrealistic requirements.
There is something that rocked Nigerian Twitter space yesterday. A Nigeria vehicle manufacturing company released a new set of car models.
A Nigerian approached a bank for car financing. They rejected saying they don't finance Nigerian made cars but they are willing to finance foreign cars. They even gave him other cars they would be willing to finance immediately.
That's the reality of the country